N.Y. Uniform Commercial Code 2-A-527 – Lessor's Rights to Dispose of Goods
Section 2-A-527. Lessor's Rights to Dispose of Goods.
Terms Used In N.Y. Uniform Commercial Code 2-A-527
- Contract: A legal written agreement that becomes binding when signed.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Goods: means all things that are movable at the time of
identification to the lease contract, or are fixtures
(Section 2-A-309), but the term does not include money,
documents, instruments, accounts, chattel paper, general
intangibles, or minerals or the like, including oil and gas,
before extraction. See N.Y. Uniform Commercial Code 2-A-103 - Lease: means a transfer of the right to possession and use
of goods for a term in return for consideration, but a sale,
including a sale on approval or a sale or return, or
retention or creation of a security interest is not a lease. See N.Y. Uniform Commercial Code 2-A-103 - Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lease agreement: means the bargain, with respect to the
lease, of the lessor and the lessee in fact as found in their
language or by implication from other circumstances including
course of dealing or usage of trade or course of performance
as provided in this Article. See N.Y. Uniform Commercial Code 2-A-103 - Lease contract: means the total legal obligation that
results from the lease agreement as affected by this Article
and any other applicable rules of law. See N.Y. Uniform Commercial Code 2-A-103 - Lessee: means a person who acquires the right to possession
and use of goods under a lease. See N.Y. Uniform Commercial Code 2-A-103 - Lessor: means a person who transfers the right to possession
and use of goods under a lease. See N.Y. Uniform Commercial Code 2-A-103 - Present value: means the amount as of a date certain of one
or more sums payable in the future, discounted to the date
certain. See N.Y. Uniform Commercial Code 2-A-103
(1) After a default by a lessee under the lease contract of the type described in Section 2-A-523(1) or 2-A-523(3)(a) or after the lessor refuses to deliver or takes possession of goods (Section 2-A-525 or 2-A-526), or, if agreed, after other default by a lessee, the lessor may dispose of the goods concerned or the undelivered balance thereof by lease, sale, or otherwise.
(2) Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 2-A-504) or otherwise determined pursuant to agreement of the parties (Sections 1–302 and 2-A-503), if the disposition is by lease agreement substantially similar to the original lease agreement and the new lease agreement is made in good faith and in a commercially reasonable manner, the lessor may recover from the lessee as damages (a) accrued and unpaid rent as of the date of the commencement of the term of the new lease agreement, (b) the present value, as of the same date, of the total rent for the then remaining lease term of the original lease agreement minus the present value, as of the same date, of the rent under the new lease agreement applicable to that period of the new lease term which is comparable to the then remaining lease term of the original lease agreement, and (c) any incidental damages allowed under Section 2-A-530, less expenses saved in consequence of the lessee's default.
(3) If the lessor's disposition is by lease agreement that qualifies for treatment under subsection (2), the lessor may elect to proceed under subsection (2) or Section 2-A-528. If the lessor's disposition is by lease agreement that for any reason does not qualify for treatment under subsection (2), or is by sale or otherwise, the lessor may recover from the lessee as if the lessor had elected not to dispose of the goods.
(4) A subsequent buyer or lessee who buys or leases from the lessor in good faith for value as a result of a disposition under this section takes the goods free of the original lease contract and any rights of the original lessee even though the lessor fails to comply with one or more of the requirements of this Article.
(5) The lessor is not accountable to the lessee for any profit made on any disposition. A lessee who has rightfully rejected or justifiably revoked acceptance shall account to the lessor for any excess over the amount of the lessee's security interest (Section 2-A-508(5)).